For a variety of reasons, including the potential for superior returns and its unique structure, bitcoin has gained value and become a popular commodity among investors over the past decade. However, many individuals are still hesitant to invest in the unregulated realm of cryptocurrencies, especially in these difficult economic times.
We live in uncertain times, with people around the world expecting a global recession as a result of the COVID-19 outbreak. Investment options may not be the first thing that comes to mind when trying to be frugal, but some things are worth investing in.
One of them is cryptocurrency. According to recent figures, an increasing number of people are taking the leap and investing in bitcoin. In addition to their economic potential, BTC and Altcoins have many additional benefits, including quick, convenient, and secure payment options. These are some of the reasons why many online casinos accept digital money as a form of payment. Furthermore, due to its desirable features and utility, some even offer it as the sole mode of payment.
To make things a little easier for investors, we have compiled a list of key things they should know about investing in digital currencies during the crisis.
- Don’t worry:
First and foremost, it’s important to remember that we’ve been here before. While the cause of the current economic crisis is different, recessions, depressions, and reforms are all common market cycles. For that purpose, the first rule is never to panic or make decisions based on fear.
2. Invest in Bitcoin:
Any hedge fund manager or individual who assesses the risk of their portfolio should come to the same conclusion: buy bitcoin. Bitcoin and cryptocurrency, in general, are perhaps the only fully uncorrelated asset in the world, meaning that their value is not driven by the same underlying variables as anything else. It adds specific risk to your portfolio, as opposed to the systematic risk of every other asset.
Everyone should have a minor stake in bitcoin as it protects them from money and harmful factors. This is essential for risk management to be effective.
The ideal strategy for a retail investor to invest in bitcoin is dollar cost averaging. Dollar-cost averaging eliminates the uncertainty and danger of buying everything at once. It is a price-agnostic technique that allows you to buy dips in a rising market over time.
3. Fundamental Analysis:
In 2022 the focus will be on better understanding the coin or token. With new participants entering the market on a regular basis, knowing tokennomics, roadmap, market cap, and utilities will have a significant impact on selection. If you are not familiar with the concept of fundamental analysis, reputable exchanges ensure that only proven, safe and trustworthy tokens are available for you to choose from.
4. Account Volatility:
According to the CTO of Paycer, Nils Gregersen, the current crypto market is witnessing a huge boom. And this trend could lead to a lot of volatility in the coming months as consumers start to cash out their holdings.
And, given the prevalence of ‘pump-and-dump’ (pumping an asset simply to create an inflationary sentiment to prop up prices) in the crypto sector, there could be some cooling or delayed consolidation. However, this is not causing concern. If you are not a cryptocurrency investor.
5. Go Old School:
Bitcoin (BTC), Ethereum (ETH), and many protocol altcoins such as Polkadot (DOT), Polygon (MATIC), and Solana (SOL) bear a resemblance to old-school crypto kingpins. These assets are designed with mining scalability, transaction efficiency, blockchain interoperability and other considerations in mind, making them reliable investment instruments.
As an investor, if you are not convinced by new cryptocurrencies and their stated use cases, then keeping a book in mind and evaluating these tried and tested crypto players seems to be a better option. If you want to learn more about any of these assets, BuyUcoin has you covered.
The greatest method to safely capture the overall growth of cryptocurrency is diversification and reaping the benefits of growth from different coins. Also, between January 2016 and January 2018, Corgicoin climbed 60,000x, while Verge went up 13,000x. During the same time frame, bitcoin has increased 34x. While bitcoin may have provided you with significant returns, diversifying into other coins could provide you with even greater returns.
7. Don’t Always Buy ‘Dip’:
You must have been buying dips as an investor for quite some time now. However, with the market likely to cool and consolidate, any pullback in 2022 will be unprofitable. To be safe, focus on value-buying if the market or the appropriate crypto-asset experiences a new surge.
At the end of the day, one of the most important hurdles for investors when considering crypto as an asset is to avoid getting swept up in the excitement. Despite the fact that digital currencies have become important in the portfolios of many large investors, and have even seen some institutional acceptance, experts have been advising investors to be cautious due to the volatility associated with crypto.
If you are considering investing in the cryptocurrency market, it is important that you do thorough research before investing your hard earned money.
While 2021 was the year of cryptocurrency dominance, 2022 will re-open the term “crypto resilience”. And as an investor, your main focus should be on getting information throughout the year. Additionally, services such as BuyUcoin are there to assist you with comprehensive listings, trading tools, risk analyzers, and more.
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